M-Prize Finalist
This story is one of 24 outstanding entries selected as finalists in the Long-Term Capitalism Challenge, the third and final leg of the Harvard Business Review / McKinsey M Prize for Management Innovation.
DIRTT — Doing It Right This Time — is revolutionizing the manufacturing and building industry by empowering self-professed DIRTTbags (no, not those kinds of dirt bags) to be accountable for driving innovative change. The result? A collaboration of passionate people working to create sustainable and agile solutions for the built environment. DIRTT’s products and culture are deeply rooted in a leadership philosophy with a scalable model that supports all stakeholder values. Being a DIRTTbag means being adaptable, passionate, agile, customer-focused, and oftentimes quirky. We’re empowered to create change, we thrive on solving problems, and we live and breathe this culture every day—it’s how we’ve created a solution of products that are changing the way interiors are built.
We are DIRTT Environmental Solutions, North America’s leading manufacturer of modular architectural solutions (walls, doors, millwork, floors, plug-n-play power and data, etc.). We build prefab agile and adaptable interiors for office spaces, healthcare facilities, classrooms, and anywhere else you can think of. Think of our solutions as children’s building blocks for the built environment – smaller pieces come together to form whole solutions, in any way needed. You create, we build. Our head office (and one of our three manufacturing facilities) is located in Calgary, Alberta. We currently have 119 North American Distribution Partners, with our other two manufacturing plants in Savannah, Georgia and Phoenix, Arizona. DIRTT is currently also expanding into the Middle East with Green Learning Centers (no traditional showrooms here) in Beirut and India.
We’re a young company, and we’re growing quickly. DIRTT was incorporated in 2005 and we’ve since grown to more than 700 employees with revenues of $116 million and 40% year-over-year growth. While we have an industry-leading package of solutions that’s won us clients such as Apple, Google, Devon Energy, Bank of America, Morgan Stanley, AutoTrader and LinkedIn, it’s our culture and leadership style that’s truly responsible for this growth. Not many companies can refer to their employees as DIRTTbags in a way that makes them feel like part of a family. We have weekly social events, company-wide gatherings, and team building sessions throughout the year, where we truly come together to learn from each other and grow together.
At DIRTT we say that, “custom is our standard” because we do not have any standard offerings. Every single wall frame, tile and support is custom made for each and every job. The sky is the limit when it comes to designing and building with DIRTT.
A Few Cool Stats:
- 2011 revenue $116 Million. 2012 is on track to be $140 Million
- Awarded 2012 Deloitte Canada’s 50 Best Managed Companies
- Client list includes numerous Fortune 500 companies, banks, professional towers and health ministries around the world!
- Founding Canadian B Corp member
- 2,450,580 lbs of manufacturing waste diverted from landfill in 2012
- Coolest Raw Material: Denim Insulation (See Picture: Houston + Denim)
Disruptive Innovation: an innovation that creates a new market by
applying a different set of values, which ultimately overtakes an existing market.
– Clayton Christensen
DIRTT’s leadership and management style create a culture that encourages disruptive innovation every day since the company’s inception seven years ago. DIRTT stands for Doing It Right This Time and is commentary from a legacy company named SMED International, once owned by DIRTT founder Mogens Smed and later sold. In its heyday, SMED grew to a $300+ million company – but this success was realized through the means of a traditional, top-heavy, silo-managed organization. Doing It Right This Time means turning that management style upside-down and empowering employees to be autonomous and entrepreneurial. Working at DIRTT is like nothing Rosalynn nor I have ever experienced before. The intensity, agility, rapid growth, empowerment, accountability, and social and environmental commitment have proven that a strong business case exists for the new economy. This new economy proves that a business can make its shareholders a substantial profit and take care of its community and environment. This evolution of innovative social purpose businesses can only occur through revolutionizing the leadership and management model.
DIRTT is a young company. At the tender age of seven, we’ve covered a lot of ground. Growing to more than 700 employees and over $116-million in revenues in such a short time takes a “special” group of people. We say special in quotations because we use it to encompass the differences that we like to think set us apart: an intense need do good; a drive for unprecedented success; a vision to change age-old building processes and the naiveté to go full-force ahead without the fear of failure.
Two weeks into my new life as a DIRTTbag, I (Rosalynn) was sitting in our company dining area, Greens Bistro, enjoying a weekly lounge night with colleagues. Our CFO approached me and asked me in a serious tone, “So, what’s wrong with you?” Naturally, I was a bit taken aback. I didn’t fully understand the culture yet and responded with a less-than-eloquent, “Huh?” He asked me again, “What’s wrong with you? No one normal fits in here easily and you seem to fit in pretty well. So, what’s wrong with you?” This memory brings a smile to my face because it’s one small example of how DIRTT has always gloried in its own way of doing things and being a bit different. The management style we embody is embedded in the company since the conception of DIRTT. Doing It Right This Time is based on the idea there is “A little DIRTTbag in all of us.” I admit, it’s a character trait we’re proud to tout.
What follows here are the stories and observations from two DIRTTbags (DIRTT doesn’t use job titles). We’ll tell you how a radically innovative organization uses a new leadership model to demonstrate how it became so successful in the North American manufacturing sector—an industry that is dying out in many other areas. What is important to note is that not only is DIRTT proving you can be a profitable manufacturer in North America, but that you can do it in a sustainable manner, from product design right through to manufacturing processes. Sustainability is embedded in every aspect and every role at DIRTT, from selected cleaning agents for our toilets to a product built to last a lifetime (not obsolescence!).
We’re drawing on a number of MIX’s Moonshots to frame this discussion. We want to share a few stories for each of the five Moonshot areas that clearly demonstrate how DIRTT’s model of leadership is not only successful, but is also scalable and applicable for both a private and public company. DIRTT’s culture is one of autonomy and accountability. We have clients all over the world and our continually growing client list becomes more impressive each month. The following stories demonstrate some of the DIRTTy aspects that set us apart.
1. Expand the scope of employee autonomy
As DIRTTbags, we admittedly thrive on toppling silos and crushing bureaucracy in the name of better business. With over 700 employees, locations all over North America, and 40% year-over-year growth, following a typical MBA route of analysis-creating-paralysis just won’t do. This flat organization empowers everyone, from the factory DIRTTbags to the finance team, and is a result of having a creative and inspiring leader: Mogens Smed. Mogens is an entrepreneurial visionary who challenges the status quo: everyone is accountable for their own areas and they make their own decisions to better their role and improve the organization. Many of our greatest cultural and product innovations have come from the factory floor.
Here’s one small example of what happens when a company empowers its employees to continually improve the company: the invention of the Cookie. DIRTT used to use wooden 2x4s to separate our walls when shipping from factory to job installation site. Henry, a factory floor DIRTTbag, thought up a design for something we affectionately now refer to as our Cookie. This molded plastic unit—which we affectionately think resembles a traditional Dutch chef holding a cookie tray—safely and securely separates our walls to ship to site, and can be reused an infinite number of times. Cookies are collected and sent back to the closest DIRTT distributed manufacturing site for reuse in other shipments.
In typical manufacturing facilities, admin offices are above the factory floor, looking down with closed offices and a host of doors separating the areas and employees. At DIRTT, our admin “fishbowl” is an open floor-plan, glass-walled structure on the factory floor. The fishbowl houses a range of staff, including our COO Tracy Baker, our procurement team, product development, engineering, and payroll. Factory employees are welcome to come in anytime to chat directly to our COO or anyone else they need to speak with. Closed door meetings are non-existent; we operate transparently so everyone knows what’s happening and can contribute to the success of the business.
We have no official job titles at DIRTT. No one is restricted by their label or role; we have had people move from the factory floor to the procurement team to the accounting department. Anyone can be an inventor, and anyone can call Mogens at any time to ask him a question or offer a suggestion. Recently, factory employee Slav designed a way to reprogram a CNC machine to save a few seconds on an operation that he performed hundreds of times each day. He emailed Mogens to tell him about it and within a few minutes he had a response directly from Mogens. Mogens found him on the floor the next day to congratulate him for his smart thinking and efforts.
2. Encourage the dissenters
We enjoy discussing LEED vs. LEAD. LEED stands for Leadership in Energy, and Environmental Design, an internationally-recognized rating system that many construction projects adhere to in order to gain environmental credits. DIRTT prefers to lead. Rather than trying to adapt a building plan to suit some third-party verification that oftentimes acts merely as a step in the right direction, we design our products, our culture and our whole business model around leading the pack. DIRTT creates products that are inherently sustainable and don’t need LEED credits to prove it, because chasing LEED credits can actually create a more unsustainable approach or building. We like to challenge assumptions and feel that the very nature of LEED is worthy of being challenged. Mogens is outspoken about his disdain for LEED and will go nose-to-nose with anyone that wants to challenge him on it. For example, a building can receive LEED points for having a bike rack, but it doesn’t say anything about the application of the rack. So we put a bike rack on a ceiling in the Phoenix factory to draw attention to the holes in LEED’s system and to make people think. DIRTT is leading by creating a sustainable approach throughout our business practices.
By working with our suppliers to create as many mutually beneficial relationships as possible, we’re trying to develop a supply cycle rather than a supply chain. For example DIRTT is now almost a zero-waste production facility. Yes, wow. This is a big deal! In traditional stud and drywall construction, Cornell University’s research concluded that roughly one pound of waste ends up in a landfill for every square foot of drywall used! One of the initiatives we’ve created to help us achieve zero-waste is the use of denim insulation in lieu of fiberglass. It’s made of 80% recycled denim and the rest is cotton fiber, and it’s completely reusable – unlike fiberglass. Another initiative is with a local Calgary company called Full Circle. Full Circle takes DIRTT’s wood scraps and turns them into a lawn fertilizer. These initiatives demonstrate the tip of the iceberg when it comes to the ways DIRTT “walks the talk,” not because it gets us credits but because, simply put, it’s a better way to do business.
3. Redefine the work of leadership
DIRTT promotes leadership throughout the organization; from an individual on the factory floor, to the entire company making an impact at the community level. When the Savannah factory opened in 2009, there were very limited recycling facilities in the city. Because DIRTTbags are driven to make a positive impact wherever we go, we helped the city of Savannah setup a recycling program that now serves the entire area. This shows our commitment to environmental practices, leadership and the importance of the community in which we work. As a result of the work there, DIRTT COO Tracy Baker was recently honored with a community leadership award from the Savannah Technical College Foundation Community Council, for her accomplishments and contributions toward making Savannah a better place to work and live.
(Rosalynn) — At my hiring interview, my (now current) team leader told me if we never had to talk about work, that would ideal. He is incredibly supportive, knowledgeable and will go to bat for me if I ever need him to. We do talk about work every day, but he doesn’t want to manage every detail of his team. Projects are scheduled down to the minute at DIRTT. If someone on the floor has a question about one of our jobs, we need to know we can make that decision right now or we risk holding up the whole factory. If we had to follow traditional bureaucracy or chains of command, we would never get an answer in time. We know we can make decisions and that at some point we will make a mistake, but as long as we can own up to it, we don’t need to be led and managed every step of the way. (See picture: PM Powwow)
DIRTT’s hiring practices also reflect our unique approach. In lieu of a human resources department, we have a Talent Agency. We don’t look for the longest resumes or highest credentials (in fact Mogens is rather outspoken against MBAs). We do look for people that work hard, learn fast, fit into our culture and are able to manage themselves while contributing to the greater team. Our individual eccentricities are not only accepted but encouraged. Our culture and leadership is the only way we can have so much autonomy and yet so much cohesion in the company.
4. Humanize the language of business
DIRTT has created a language all its own (in case you couldn’t already tell). We’re DIRTTbags, and we’re proud of it! Our product line names extend from Madonnas, Cookies, and gerbils to UFOs, Breathe (pictured), flux capacitors and antlers. Sure, they all have technical names, but when you have a part that looks like a chef holding a cookie tray, it’s more fun to call it a cookie and far easier to remember. (You should see the Madonna…)
A lot of our parts and pieces were named by a group of early DIRTTbags (there may or may not have been a bottle of wine involved…) that looked at each individual piece to decide what it looked like.
There is a lot of technical jargon that could surround our company. We are a manufacturing company that deals with construction, architects, designers, clients, general contractors, lawyers, government etc. We have to have a language that can work for each and every one of these groups, and just as importantly, for each DIRTTbag. We hire for passion, intelligence and “fit” so we can’t get bogged down in technical jargon because the world of construction and manufacturing is new to many DIRTTbags. We have an incredibly diverse workforce and our language must be accessible and understandable for people from all industry backgrounds. Our language is organic and homegrown. It is a reflection of our culture and our dedication to doing this differently. It makes us feel like we are even more a part of something. And it’s part of being a DIRTTbag to be a bit quirky.
5. Take the work out of work
Each DIRTT Factory is equipped with a full kitchen and talented chefs that prepare healthy lunches for DIRTTbags every day of the week. We have a salad bar, cold meats, cheeses, fruit and hot food options every day, for just $2/day. We watch in delight when new employees discover the wonders of our kitchen and the candy drawer (and on that note, we also have a self-monitored fitness program). This meal program isn’t a money-making practice for DIRTT. In fact it’s a healthy expense, but the team knows the value. Employees are fed well, we get a chance to have lunch together and socialize and we don’t have to drive to a restaurant or pack our own lunches every day (which reduces our environmental impact as well).
Each week, we are treated to “lounge night.” At 4:00 pm each Thursday, we head to Greens Bistro and enjoy some pub-style fare, a drink and a fun activity (such as trivia, games, seasonal fun, etc.) DIRTT’s culture is based on camaraderie, and when things get stressful it’s great to kick back and socialize while getting to know one another better. (See picture: Play Doh).
In addition to lounge nights, we have Beer Nights once per month. These meetings build on the social aspect of lounge nights but act as opportunities to share everything about DIRTT with the employees. We have complete transparency and all the successes, failures, positives, negatives and new initiatives are discussed at these meetings. For example, DIRTT recently underwent a 40,000 sq/ft expansion in the Calgary factory. Before we made this move, the plans, layout and design of the new space were discussed and comments were invited from all of the people that would be using the new space. Throughout these discussions, the layout was fine-tuned to allow for the greatest efficiency and cost savings and also resulted in happier and more engaged floor staff. Like any company, DIRTT relies on the dedication of its employees. With transparency, all DIRTTbags have the opportunity to be engaged and contribute even more to the company. With so much autonomy, DIRTT has found a way to keep all the DIRTTbags moving in the same direction. Everyone understands our vision, mission and goals and can make the decisions necessary to make them happen.
DIRTT participates in community events throughout the year as well. We cook dinner for the families at the local Ronald McDonald Houses, “adopt” families at Christmas, and support fundraising efforts throughout the year. Last year, DIRTT raised over $29,000 for cancer research in just one month, making it the 3rd largest one-time corporate donation to the Canadian and American Cancer Funds!
We have chosen to use this section to address some of the judges and reader's comments regarding our case and incredible company.
Challenges - Responses to Judges and MIX Readers Comments
JUDGES
Autonomy AND Cohesion:
- How does DIRTT create so much autonomy?
The first method of creating autonomy is getting the right people on the bus. Our talent scouts (aka: HR) are well aware that many of the applicants have incredibly strong resumes and would be fantastic at many other companies, but they would not last a day at DIRTT. We do not hire by resumes, rather we focus on personalities and energy. A successful candidate has to:
- Have entrepreneurial spirit: someone who always is looking to improve something and sees opportunities for optimizing what ever they are working on.
- Be full of energy: DIRTT is a very high-paced, energetic organization. If a person cannot thrive in an open office that is loud and sometimes rather intense they will not survive.
- Be very competitive: Competitive with themselves to always improve any area in which they see opportunity. Mogens Smed is also always raising the bar, even when every other organization or “MBA” says it makes no sense – DIRTT takes on the challenge through innovation and a dedicated team.
The second way of creating autonomy is through the lack of bureaucracy and “normal business systems and processes”. For example, DIRTT does not use a MRP or ERP system. Rather, we place responsibility upon the individuals to manage their area in the best way possible. This agility allows for rapid response to market changes and the introduction of a new product like our DIRTT Millwork. During Mogens annual corporate address, he stressed that his biggest fear was that lethargic bureaucracy could start to creep into DIRTT given our size. Through our innovative leadership and strong team members, we are continually challenging each other to keep this sloth-like behaviour out of DIRTT.
At the end of the day, it comes down to a ridiculously passionate group of people who truly believe in the vision and mission of the organization and are willing to work harder, longer, and smarter to make it the success that it is.
a) How does this create a culture of innovation/entrepreneurism?
Similar to the “co-working spaces”, or innovation centres, or Hub locations that have proven to foster and support innovation and successful blended value businesses, DIRTT creates an environment in which cross-pollination of ideas results in staggering innovations. For example, we have close to 50 programmers for our ICE software in the same location as our automation, product development, and factory floor. So when the floor comes up with a way to do increase capacity, within minutes you can pull together a person who understands gaming technology and 3D modeling programming, a person who works with the materials and machines every day, and a person who can design a product using a rapid prototype; what results is creativity and innovation. No offices. No executive approval. No forms to fill out. No Six Sigma. Just a group of passionate entrepreneurs, who are innovating the building industry through agile distributed manufacturing.
There have been numerous studies and papers written that prove that innovation is a result of culture. Innovative companies don’t get that way by accident. It is through concerted effort and deliberate culture creation that these innovations happen. Our culture is embedded throughout the organisation – the commitment to our somewhat quirky culture is evident right from the parking signs at the front of our headquarters in Calgary. Signs like, “This spot is reserved for our esteemed guests”, “DIRTT Van parking only (just a dirty van doesn’t cut it)”, and “ICE Van parking, yes you’re cool, but if you’re not ICE, move along” give you an indication of what our culture is like before you even step inside the building.
2. How is it that there's so much freedom and self-determination and downright eccentricity and ALSO such strong cohesion and sense of purpose?
It is like the idea of a “Fractal” – self similarity – when you get a bunch of like-minded, driven people who all understand the vision and mission of DIRTT there is no stopping us and beautiful things are created. To foster this collaboration and cohesion, complete transparency is essential. There are no closed door meetings about new products or expansion plans or financial results. Everything is shared from the remote technicians to the agile factory floors. One way DIRTT has captured the practice of our transparency, is through becoming a B Corp. Through completing the Impact Assessment we have demonstrated and proven our high level of transparency.
As mentioned, DIRTTbags are hired for “fit” in the organization; we hire people that are capable of working autonomously but also cohesively. As the “lessons-learned” section below shows, DIRTT operates under a number of very important dichotomies. The vision and ideal future state of DIRTT are so well communicated that people who are capable of working independently know what they are working towards and can make the decisions necessary to make the future state a reality.
LEED vs. LEAD
3. Developed why LEED isn’t necessarily the right guide, but how do we LEAD??
By all accounts LEED has moved the building industry towards more sustainable practices, and provides some adequate guidelines for designers, product manufactures, and contractors to consider in their work. What DIRTT feels it is missing is the behaviour and lifecycle of the occupants and building/materials remains unaffected. If you get points for using “100% recycled edible carpet”, but 2 years after the building opens the carpet ends up in a landfill because of its short life cycle or because it cannot be reconfigured due to occupancy changes; is this product and building really sustainable? DIRTT’s walls have zero obsolesces, and the raw materials of aluminum, glass, and medium density fibre board will last decades and decades. They can be configured again and again for each client’s changing needs. For DIRTT this is true sustainability, materials that last, and products that address the behaviour and life cycle of the building. There are some gaps within LEED to address these sustainable ideas; hence DIRTT’s LEADing the building industry. DIRTT has created an inherently sustainable product and company without chasing external metrics or certifications. We don’t do these things because they are a good marketing campaign, we do them because they create a better product.
Culture Creation
4. How do you create a culture where everyone is encouraged to think and act likes a leader every day?
Hire a bunch of energetic entrepreneurs who would do this anyway, but now have the power of collaboration and resources to make their passions a reality. The other successful way to encourage leadership is to always challenge people to step up and promote from within. Taking someone from the factory floor and sticking them in a procurement role, might seem completely foreign to many organizations. At DIRTT this type cross training allows for great success, since in this example the factory floor person truly understands the PAIN that occurs when materials run out or are of low quality. Therefore, they are dedicated to ensuring that the factory always has high quality materials. There is no need for a “degree” to do this role; you need common sense and a passion to lead.
If you instil a sense of accountability and ownership into all people, the leadership comes naturally. They do not want to let the team down. They understand the consequences if their area drops the ball. At DIRTT we have the shortest lead times for manufacturing a 100% custom product in the industry, and we must rely on everyone to lead their area to ensure everything is done on time and communicate if there are any challenges so the team can pull together and find a solution immediately so the client does not get affected. This could not be accomplished without our amazing vendor partnerships.
Meta Lesson
5. Extract a "meta" lesson--so many organizations and individuals are caught up in industry standards, numbers, and “credits" that they focus their efforts on hitting that number/target but sacrifice the big picture?
Driving top line sales through dedicated customer service and delivering product that is above and beyond the clients expectations is essential. The reputation, brand, and functionality of DIRTT product allows this top-line to grow at a staggering rate and on an international scale. When growing at this rate building capacity is essential. Therefore in 2009 when everyone else was closing facilities and doing layoffs, DIRTT expanded to Savannah, Georgia and had access to some of the best locations, best vendors, and best employees a company could dream of. When the GSA contracts were being awarded the same year, DIRTT could easily respond to the sales and meet the lead times requested. Other organizations had to rehire, train, and react. DIRTT is proactive in building capacity. The ROI comes ten fold when you can meet the client’s demands and expectations.
Having a Board of Directors and investor group that understands this vision and strategy for achieving it is imperative. DIRTT has walked away from a few attractive investment opportunities, because the investors just did not get it. They wanted all the metrics to meet industry standards or averages…what’s innovative about that? DIRTT’s year after year growth is followed by an equally impressive gross margin due to the dedication and alignment of vision among all team members to be accountable not only to the shareholders, but to all stakeholders creating true sustainability.
MIX Readers
1. How does DIRTT choose, or engage their Distribution Partners? Is the DIRTT management style required to be adopted by the Distribution Partners?
DIRTT’s 120 Distribution Partners (DPs) are brought up to the head office in Calgary Alberta to “drink the koolaid” so to speak. They go through an intense training of all aspects of the organization, including product knowledge training, ICE training, and factory training. By being immersed in the culture of DIRTT, they understand what the vision is and how to sell it to clients. They learn how to sell the complete solution to the clients so they end up with products that will meet ALL their needs; even if they do not know what they are right now.
All DP’s are part of the DIRTT TEAM. During Neocon, the largest building design conference in North America, DIRTT has all the DP’s come in for two intense days of training on the latest and greatest things from the past year. Then rather than building a standard booth at the Mart along with thousands of other companies, DIRTT has an amazing party at our Green Learning Centre across the street. This penthouse location becomes THE hotspot every year, since there is amazing music, drinks, great food and everyone is mingling around DIRTT’s latest and greatest products overlooking the river. This is an innovative way to showcase DIRTT’s products to the world, and allows the DP a great opportunity to work within our culture.
Our culture and focus on customer service is something that really sets DIRTT apart from other organizations in our industry and many businesses in other organizations as well. Our distribution partners drive our sales and are in direct contact with our clients around the world. If they didn’t understand and embrace DIRTT’s culture, they wouldn’t be selling the true DIRTT solution. They are the ones that know their local markets best, so again, they need to be autonomous in order to react appropriately to the needs of their clients but DIRTT has created an award winning culture, and sharing that with our clients sets DIRTT and the distribution partner apart from the other players in the market.
2. I am interested to know more about DIRTT's human capital development strategy. Does DIRTT partner up with local university to create special courses or programs?
DIRTT has recently teamed up with Duke University to work with some graduate students to look into the end of product life cycle. They provided an excellent report on what options are currently available for end-of-life product return, but understood that DIRTT’s unique perspective on materials and sustainability. This was very successful both for the students to work on an actual case, and for DIRTT to have someone from the “outside” to look at our materials and product lines. This information can now be used by product development as well as the Distribution Partners when faced with questions about life cycle of materials.
A second great initiative is the summer student program DIRTT does every year with 30 to 40 post-secondary students from all major education streams. This exposes students to practical work terms, and has also resulted in a number of students returning upon graduation to work full time with DIRTT.
We have regular tours and teaching days with students from local universities. They come in to learn about DIRTT, our design software ICE and our culture. DIRTT University is a program that provides our ICE software to university students for free.
At the end of the day, many of the new hires are through personal networks and referrals, as once you start talking about DIRTT and our unique culture people want to be part of something so inspiring and exciting!
You’ve read about some of our competitive advantages, our culture, and the innovative leadership style we credit with our success. One of the best ways to judge our achievements with this innovative leadership approach is seeing the accolades the public has bestowed upon us. Here are our recent awards:
2012
- Finalist - International Design Excellence Awards by IDSA
- Best Managed - Deloitte's 50 Best Managed Companies in Canada
- Top Movable Wall - Contract Magazine Brand Report
2011
- Rookie of the Year - B Corporation Championship Awards
- Green Exhibitor Award - Advocate Level, Greenbuild International Conference & Exhibition
- Best in Show - Booth Design Award, NeoCon East - IIDA and Contract Magazine
- Excalibur Award - Technology Association of Georgia
- Workplace Innovator Award - Step Up Savannah
- Gulfstream Community Service Award - Savannah Area Chamber of Commerce
- PM100 for Innovation Mastery - Progressive Manufacturing Magazine
- Bloom Award for Innovative Materials - ASID and Interiors & Sources Magazine
- Fast Growth 50 Award - Alberta Venture Magazine
- Top 10 Green Building Product - Sustainable Industries Magazine
2010
- Sustainable Exporter of the Year - Alberta Export Awards
- ASID Product Award - Individual: Mogens Smed
- The Calgary Award for Corporate Environmental Achievement
- Top Product Award - Healthcare Design Magazine
- Fast Growth 50 Award - Alberta Venture Magazine
- Manning Award for Outstanding Innovation
We have collected a few of these benefits and some metrics that prove DIRTT is truly bleeding-edge when it comes to innovation in product design, manufacturing processes, leadership and culture. Below we present what we feel is some proof and the financial results to match, that illustrate why in our opinion, DIRTT is the most innovative company in North America.
The Proof:
- 5 Year Revenue CAGR of 41.5%
- Increasing revenue from new industry verticals and internationally
- Strong gross margins ~ 40%
- 2011 revenues in excess of $115Million; current run-rate exceeding $150Million
- A strong growth forecast with growing sales pipeline: including the potential for Apple's new headquarters and Exxon Mobil's new Campus
- Distribute Manufacturing with significant capacity added in 2011 (Phoenix opened July 2011, and Calgary expanded August 2011)
Revenues over the past 7 years:
- 2005 - $2.4Million
- 2006 - $20.5Million
- 2007 - $49.0Million
- 2008 - $73.4Million
- 2009 - $93.4Million
- 2010 - $98.5Million
- 2011 - $116Million
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Be strategic where applicable, and reactive when necessary
- Don’t rush or purely react to strategic decisions. Some decisions require time, collaboration and planning.
- Remain agile enough to react quickly when necessary. Some decisions need to be made immediately; there are times when we know it’s better to ask for forgiveness rather than permission.
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Use technology where applicable, and people where applicable
- Automate what we can, but recognize where the human aspect is superior. Our technology and proprietary ICE® software have made DIRTT a game-changer in the construction industry, allowing us to deliver product in half the time of our competitors. Yet it’s our culture and the human aspects of our customer service that truly sets us apart and wows our clients.
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Consider sustainability in every decision
- What is right from an environmental, community and financial perspective? Our new denim insulation is easier and safer to work with, is made of recycled material and is recyclable, and is 40% cheaper than the fiberglass we used previously.
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Make decisions for the right reasons
- Make decisions that are best for DIRTT and the client, not just to appease shareholders. Our shareholders are important people, but more important is going home at the end of the day and being proud of the work we’ve accomplished.
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Challenge the status quo, and then challenge ourselves
- Be different, not for the sake of being different but for the sake of doing it right.
- Thinking conventionally would destroy our competitive advantage.
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Do what is fair
- To our employees, our shareholders, our vendors, our partners…
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Acknowledge our people
- DIRTT is not made up of buildings, products, software and processes. It’s made up of people who use those things as resources.
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Top-line Thinking
- Without the sales we have nothing.
- We will not sacrifice growth for bottom-line thinking.
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Always be ahead of our growth curve
- We build our agile factories BEFORE we need the capacity, so we never have to tell a customer that we will not be able to meet our industry shattering lead times of 2 to 4 weeks for custom product!
DIRTT’s innovative approach and culture has allowed us to enjoy rapid growth as a successful company. The management style is embedded throughout and our vision and mission are integrated into everything we do. Operational transparency means every employee knows where they stand and together we’re pulling in the same direction.
This approach has grown DIRTT from 3 employees to over 700. It’s proven to be successful, scalable and repeatable throughout the organization and across demographics, and we’ll work to maintain it as we grow. DIRTT is unlike anywhere either of us has ever worked before and that’s due to the disruptively innovative management style that we work with every day.
Authors: Houston Peschl & Rosalynn Dodd
Editor: Liane MacNeil
And the other 697 DIRTTBags that make DIRTT so successful!!
DIRTT is truly an amazing company! I had an opportunity to visit its headquarter in Calgary last month and was particularly impressed by its ICE software and the food served from its kitchen. One can really sense the "unique culture" that lies within the organization.
I am interested to know more about DIRTT's humane capital development strategy. Does DIRTT partner up with local university to create special courses or programs?
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This piece does an excellent job of exploring and explaining what DIRTT is and how they’re impacting and changing the world of traditional interior construction.
Though the Summary is well-written, one small change that may provide a better explanation to those who may be unfamiliar with DIRTT would be to use information like the first sentence written in the Context section ("We are DIRTT Environmental Solutions, North America’s leading manufacturer of modular architectural solutions (walls, doors, millwork, floors, plug-n-play power and data, etc.).") in the Summary and waiting to introduce what a DIRTTbag is until the Context section begins. Put simply, trading the two will better answer initial questions about just exactly who DIRTT is and may stave off some preliminary confusion as their approach and methods are the only of their kind.
Beyond that, this piece is relevant, informative, and more than worthy of a read.
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The DIRTT management style in this "story of DIRTTbags" is generally reserved for technology (software) companies and the cutting edge ad-agency.
DIRTT is about interior construction-” We build prefab agile and adaptable interiors for office spaces, healthcare facilities, classrooms, and anywhere else you can think of.” This means tense timelines, stressful delivery schedules, and of course client satisfaction. All of these elements have led to a status quo in the building industry that keeps creativity, innovation, and an employee centric ideology very low on the management totem pole.
So, It's exciting to see that DIRTT looks holistically at the interior construction industry and has developed a management style that is a paradigm shift ignoring supposition. Securing clients as unique as Google and Bank of America are proof that DIRTT's management style works from the factory floor through to the final interior build out.
How does DIRTT choose, or engage their dealers? Is the DIRTT management style required to be adopted by the dealers?
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Overall, very well done. I really appreciated the inclusion of concrete examples of how employees in various departments have contributed to the company.
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DIRTT is cutting edge now, but in ten years it will be the way construction will be done. DIRTT is revolutionizing the interior construction world for the better.
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DIRTT .... as I always say to everybody: "Simple and Tough", but extremely necessary.
Looks Great!!!
Tks ;-)
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Great company with an ever evolving product offering that no other manufacturer can get ahead of.
'Be strategic where applicable, and reactive when necessary' - I love the dichotomy of the points below this heading; ' don;'t rush' and then 'react quickly'. I would say that Mogens Smed's style is the later as he often seems to shot from the hip but who in the industry has a better track record of predicting trends and placing his company in the right place to react to those trends.
Not mentioned but important to the success of DIRTT has to be the cash flow management; deposits for orders, no '800' numbers, web-based marketing materials, etc.
I hope there are other 'Mogens' being developed within the 700 employees.
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